London transport to accept contactless payments from 16 September

Transport for London (TfL) has announced today that its
contactless payment system will go live across all London transport
services on 16 September this year.

From September, customers will be able to use contactless bank
cards, or other contactless payment methods including phones,
payment tags and wearables to pay on the Tube, the Overground, the
DLR, London buses and certain National Rail services. The official
launch follows a successful pilot -- which involved around 3,000
participants -- and the launch of contactless payments across
London's buses in December 2012.

Another big change is that when customers choose to pay using a
contactless method, they will no longer need to top up or buy
weekly travel cards thanks to the daily and Monday-to-Sunday
capping systems TfL is putting in place to support the new launch
of contactless across its network. Oyster cards will continue to
still work for whoever wants to use them.

In all other cases, fares will automatically calculated to
ensure that customers are always charged the lowest amount across
the days and weeks they travel using the network, no matter how
many zones they traverse. Customers will be able to track their
spending online through their TfL accounts and only one payment per
day will be sent to their bank or financial provider. They will be
able to use their accounts on mobile and desktop with TfL's
responsive browser-based sites to complete journeys where they may
have forgotten to touch out, or obtain refunds on incomplete
journeys. TfL will no longer charge maximum fares for journeys with
no end point, but will instead estimate and autofill where
customers ended their journeys -- allowing them to change the
details if they are incorrect. All in all, there are 39 different
payment scenarios the system is currently set up to understand.
This will increase as eventually monthly and annual travel cards
are incorporated into contactless too.

For TfL, its whole payment system -- which has always been built
in-house -- is a source of huge pride, particularly as public
service IT projects have often otherwise ended in disaster. "We
feel very proud that our record of delivering IT is not part of
that horror story," TfL's customer service director Shashi Verma
told Wired.co.uk.

In order to adapt TfL's payment system to cope with contactless,
a huge makeover has taken place. Whereas currently all of the
payment processing takes place in the reader using the information
stored on the card, the process has now been moved into the back
office.

Oyster has always been prepared for the moment that contactless
cards started to become commonly used from the time banks first
started to discuss them, which was around 2007. Because they use a
common underlying protocol and the same top-level standard as NFC,
the readers are already compatible with pretty much all of the
technology people are starting to use to make payments with now.
"We are agnostic to form factor," claimed Verma.

What is different about the system is its application and the
security system behind it. Generally in the world of contactless
payments -- the retail world -- the price is known before the
payment is made, whereas with TfL, the price is not known until the
end of the journey and ultimately the end of the day or the week.
This meant that the organisation was forced to create an entirely
different model to the one used in retail -- a model that tackled
the challenges that a public transport system presented.

It's no easy feat to start building such a complex payment
system and ensuring that it remains safe and that people feel safe
using it. TfL did it in conjunction with the banks and Mastercard,
Visa and American Express. It is called the Transit Transaction
System. This means TfL could license it to other metropolitan areas
that want to take advantage of the model -- and there are currently
several countries that are showing interest in it.

The way that the model works is that a zero-value transaction is
generated at the reader. All the reader will do is complete a check
that the card is a genuine payment payment and record the journey.
At this stage, a token replaces the bank card information to ensure
encryption and the payment is generated in the back office. The
system has been designed so that only TfL will know what journeys
you have done, and your bank will only know how much you've spent
on London travel. Customers can register their bank card with their
account, much as they can with an Oyster Card already, but only
once at registration will the card information be accessed -- from
that point the information will be replaced by a token.

The front end of the system -- the card readers and the bits you
will interact with everyday -- are being maintained by a company
called Cubic. TfL itself though will be handling the back end of
the system; whereas the front end never really needs to change, the
back end does. This also means that ticketing logic can be refined
and adjusted more easily. "It seemed important for us to have the
ability to react to change and to deliver those changes quickly to
our customers. To do that for us it seemed that the best way was to
deliver this piece of the system ourselves," said Sebastien Losq,
who headed up the project.

The agency took a similar attitude to building the system in the
first place. The team worked out that they could develop it for
around a third of the cost of outsourcing it. The estimates TfL
received edged up towards the £60 million mark, but in the end, the
system was built for £11 million and is the largest example of
Agile development in the public sector.

TfL has been cautious about server space given that the demand
for its services is only likely to grow over the coming years. It
is able to handle 20 million transactions per day. It is not
cloud-based, but is running in its own data centres in a
virtualised environment and in a test was capable of running eight
weeks of all of London's Oyster data through the system in six
hours.